As a prolonged economic slump, high prices and elevated interest rates continue to squeeze neighborhood businesses, Seoul's autonomous districts are stepping up support for small enterprises and self-employed merchants.
Mapo-gu is expanding its special credit guarantee program to 41.5 billion won ($28.2 million) and building a big-data-driven support system tailored to local commercial districts. Gangdong-gu has partnered with private companies and financial institutions to raise its special credit guarantee ceiling to 69.73 billion won. Dobong-gu is offering loans of up to 3.5 billion won from its small and medium-sized enterprise development fund at a fixed annual rate of 1.5%.
Mapo-gu expands special credit guarantees to 41.5 billion won
Mapo-gu, led by District Mayor Yoo Dong-gyun, signed a "special contribution MOU for close-knit local economic support" on Friday with the Seoul Credit Guarantee Foundation, Saemaul Geumgo, Hana Bank and Kakao Bank.
The district also concluded a separate "big-data-based local commercial district support cooperation MOU" with the Seoul Credit Guarantee Foundation.
The signing ceremony, held at the Mapo-gu Office conference room, was attended by District Mayor Yoo, Seoul Credit Guarantee Foundation Chairman Choi Hang-do, National Federation of Saemaul Geumgo Seoul Regional Headquarters Director Bae Jun-seong, Mapo-gu Saemaul Geumgo Chairman's Council President Lee Chang-hwan, Hana Bank Western Business Division Head Yoo Chung-seon and Kakao Bank Credit Division Head Kim Seong-su.
In the first half of this year, the district provided 31.25 billion won in special credit guarantees in partnership with Woori Bank and Hana Bank. The new agreements add 10.25 billion won, bringing the total low-interest financial support available to 41.5 billion won.
Notably, Saemaul Geumgo — a community-rooted financial cooperative — and Kakao Bank, known for its mobile banking strengths, joined as new partner institutions. Hana Bank also committed additional funds, a move expected to broaden small business owners' access to financing and widen their options.
The special credit guarantee program allows small enterprises and self-employed merchants who lack sufficient collateral to obtain bank loans using guarantee certificates issued by the Seoul Credit Guarantee Foundation. Interest rates range from 2.61 to 3.11 percent per year, with a maximum loan limit of 100 million won per business.
Alongside the financial support, Mapo-gu will also use big data to analyze commercial district trends and develop targeted policies.
The Seoul Credit Guarantee Foundation will supply data on foot traffic, industry composition, store counts and rental prices, and will offer policy recommendations based on its analysis. The district plans to use this information to track changes in local commercial activity and consumer spending patterns, and to identify support programs suited to each neighborhood's characteristics.
"Small business owners need timely financial support to keep their operations running," District Mayor Yoo said. "Public administration must also pursue precise, data-driven policies."
Gangdong-gu brings in private sector for first time, raises guarantee ceiling by 10 billion won
Gangdong-gu, led by District Mayor Lee Su-hee, signed a "local co-prosperity special credit guarantee agreement" with IKEA Korea, Woori Bank and KB Kookmin Bank to address the triple pressures of high prices, high interest rates and a high exchange rate.
The three institutions contributed a combined 800 million won to the Seoul Credit Guarantee Foundation, raising Gangdong-gu's special credit guarantee ceiling by 10 billion won — from 59.73 billion won to 69.73 billion won.
IKEA Korea became the first private company to join Gangdong-gu's special credit guarantee program. After the district explained the program's purpose to local financial institutions and invited their participation, Woori Bank and KB Kookmin Bank also agreed to contribute.
Small enterprises and self-employed merchants registered in Gangdong-gu for at least three months are eligible to apply. However, businesses that received credit guarantee support within the past year are excluded.
The guarantee ceiling is 70 million won per business. Those who have contributed to district administration or the local community, merchants in traditional markets and alley-type shopping streets, and subsistence-level self-employed workers can receive up to 100 million won through the district's preferential recommendation system.
Repayment terms extend up to five years, and businesses that use Seoul Metropolitan Government cooperative bank funds can access financing at around 2.7 percent per year. Early repayment fees are also waived.
In the first half of this year alone, Gangdong-gu provided credit guarantees to 1,041 businesses totaling 36.29 billion won — already surpassing last year's full-year figures of 872 businesses and 30.63 billion won.
The number of small business owners using in-person application centers more than doubled, rising from 220 last year to 463 in the first half of this year.
"I hope the resources secured through this agreement will help stabilize the operations of small enterprises and self-employed merchants," District Mayor Lee said. "We will continue to expand cooperation with private companies and financial institutions and pursue effective livelihood support policies."
Dobong-gu offers fixed 1.5% rate, up to 100 million won per business
Dobong-gu, led by District Mayor Kim Dong-wook, is launching a 3.5 billion won loan support program from its small and medium-sized enterprise development fund to ease the financial strain on local businesses and self-employed merchants.
This year's loan pool is 300 million won larger than last year's, reaching 3.5 billion won.
Businesses and self-employed merchants registered in Dobong-gu are eligible. Each business can borrow up to 100 million won at a fixed annual interest rate of 1.5 percent.
Repayment terms require a two-year grace period followed by equal installments over three years. Applicants must be able to provide collateral through real estate or a Seoul Credit Guarantee Foundation certificate.
Applications are open from Monday through Aug. 14 at KB Kookmin Bank's Sindobong branch, where in-person consultations are required. Final decisions on loan recipients and amounts will be made by Dobong-gu's SME development fund management review committee.
"I hope this loan support helps stabilize the operations of small business owners struggling under the economic downturn and the burden of loan interest rates," District Mayor Kim said. "We will closely examine the difficulties on the ground and pursue support policies that merchants can actually feel."
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